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Robert Mondavi: Competitive Strategy

Business Strategy

Sudev Pradhan

on 22 April 2014

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Transcript of Robert Mondavi: Competitive Strategy

Robert Mondavi: Competitive Strategy
The Team
Threat of New Entry
Bargaining power
Differentiation Potential
Organizational Capabilities
External Analysis
Porter Six Forces Theory
Porter Generic Strategy
Focus Strategy
Differentiation strategies
60 gallon French oak barrel
Stainless steel refrigerated
The first winemaker to introduce wine tours in Napa
The use of organic grown grape
Developing sustainable farming methods expected to improve the grape quality
“ Growing Wine”
Send a vineyard specialists
High quality of grape
Using French Oak
Stainless steel refrigerator
Using gravity to transfer grape from the crusher to fermentation
The taste of the wine
The prestigious image resulting from alliances with prestigious winemakers in Europe
The barrel aging process
Focuses their marketing efforts toward a small group of wine drinkers
Educational tastings
The word of mouth effect
“The wine spectator” and “Food and Wine”
By performing an internal analysis of Robert Mondavi organizational capabilities it examines their ability to deploy resources from the beginning to a preferred end result.
External factors have a positive or negative effect on the wine business so Mondavi needs to understand and make strategies to anticipate these effects.
The Nature of Differentiation Sources
Founded in Oakville, California in 1966.
America's first premium commercial winery.
California's second largest premium wine producer.
Bargaining power of suppliers [High]
Bargaining power of buyers [High]
Wine Price of top 10 brands in 1997
A mature industry in the U.S
Obvious advantage in existed wineries
Capital Demanding for any new entry
Industry rivalry [High]
Threat of Substitutes and Complements competition
[Depending on Different Countries]
Differentiation Strategy
Porter Generic Strategy
Focus Strategy
Differentiation Potential
Organizational Capabilities
Resource Audit
Core Capabilities

Key Success Factors
PESTEL Analysis
Porter's Six Forces
Core Capabilities
Through evaluating Mondavi's internal analyse and audit resource a clear set of capabilities are displayed that supplies an overall competitive advantage into the Wine industry.

High quality wine
Brand reputation- super premium, ultra and luxury wine segments
Innovated technology

Through analyzing the differentiation models it is clear that Mondavi have effectively established a synergy effect through the interaction of multiple different elements into the wine industry.
It enables Mondavi to determine which product characteristics have the potential to create values for their customer base and their willingness to pay extra for differentiation.
PESTEL Analysis
Liable to the high
Alcohol and Tobacco Tax
Exports dependent in shifts in foreign exchange rates
, brand mix, and local excise taxes.
Quarterly earnings fallen 16% due to a
grape supply shortage
Stocks were tumbling
- end Aug 60% from its all-time high set in Oct 1997.
Grape supply problems caused by
new investors
was intense for
all products
Competition from abroad
, especially from Australia and Chile.
Pioneered the use of small (60 gallon)
French oak barrels
Newer technologies
were available to ensure that
grapes were handled gently
Redwood fermented for red wine production to enhance quality were available -
Mondavi planning to install 56($27m)
Substitutes for wine
with other beverages were available widely.
Exports - France and Italy both consumed and produced significant amounts of wine domestically.
Most Asian countries and much of the
developing world
represented a
large market potential
Federal Trade Commission's ban
of significant control over independent wholesalers
successfully lifted
in the early 1980s.
barriers were decreasing
in selected
foreign markets
and there was tremendous global
External Analysis
External Analysis
Internal Analysis
Internal Analysis
Key Issues
Grape supply shortage - lost significant market share.
Company’s stock price tumbling - in August 1998 down 60% from all time high October 1997.
Increased competition - from competitors linked to Australia and Chile
Robert Mondavi Recommendations
To offer 10-15% of Robert Mondavi equity on the public stock exchange to gain potential investors.

To implement a portfolio analysis to evaluate Mondavi products every three months.

Differentiation strategy.
Develop and expand Mondavi distribution network globally.

Expand prestigious wine and educational tasting by 25%.

Create partnerships with four and five star hotels.
Increase research and development by 10-15%
- Develop new technologies and techniques for growing and fermenting grapes.

Importing grapes from other grape growing Mediterranean regions.

Southern Australia, Mediterranean basin (regions including Southern Europe and northern Africa) and the cape of South Africa.
Thank you for listening!
Any Questions?
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